Ruminations and Fulminations

Let’s Check our Stadium Chump-dom on the Replay

The decent thing to say would be that since all of us blunder from time to time we shouldn’t get all fiery righteous when our elected leaders screw the pooch, even in a really big, major league way.

But I won’t go there. Decency is above me. There were enough of us a year ago screaming that the NFL and the Wilf family were playing us and our top-tier politicians for provincial chumps that we get this moment. We get to screw the phony compassion and tolerance bit and enjoy a moment of sweet, sweet vindication.

Over the past week it has been revealed first by Jean Hopfensperger at the Strib and then amplified by Tim Nelson at MPR (who has followed the Vikings stadium financing saga better than anyone else in the local institutional media) that the state took it’s patently absurd estimates of likely revenue from expanded, electronic gambling … from the gambling industry intent on selling them the iPad-like machines needed to play. As you may have followed, the Dayton administration first said it was unaware of the source of the numbers that showed the state raking in an easy $67 million a year from a new feeding frenzy among barflys and rubes. More than enough to cover the $348 million “share” the state (i.e. you and me) agreed to kick in to build the Vikings/NFL a new Xanadu-like football palace. Hell, Revenue Commissioner Myron Frans, an otherwise bright enough guy, even called those numbers “conservative”.

Ignore the fact no one had ever attempted to close a $348 million hole in a $970 million deal with this gimmick before.

After Dayton’s office offered that unfortunate “unaware of the source” explanation, Nelson checked the files and re-discovered a two year-old statement … by the Dayton administration … acknowledging that the aforementioned (absurd) numbers were coming from some gambling outpost in Florida. At which point the Team Dayton story switched to something like … “Well there were so many numbers flying around back then who could possibly keep them all straight?”

(And I ask you for chrissakes, Florida? Gambling experts? … in Florida? Mullets, dead manatees, shirtless hillbilly meth-heads hiding under double-wides? And no one was suspicious enough to get a second opinion? What if I said a Russian guy I know has a trunk full of Rolecks watches? Do you start lining up in the parking lot with rolls of Twenties?)

I’m forever fascinated by episodes of mass psychosis and group-think by supposedly shrewd, nervy people.. (We just observed the 10th anniversary of the establishment/media consensus on invading Iraq). In the case of the Vikings stadium we had, in no particular order:

* A lone-wolf, oddball of a Governor eager to show he could play well with the state’s far more socially adroit corporate power interests, and create several thousand well-paying, albeit temporary construction jobs in the process.

* A DFL-aligned union machine determined to deliver those — temporary — jobs to dues-paying members desperate for work.

* The state’s loudest media voice — the Star Tribune — incessantly campaigning in favor of a highly traditional deal that asked nothing more of the NFL than the league was willing to give.

* A sports “news/entertainment ” complex too craven to explain to its viewer/reader/listeners that they actually had leverage in this fight and that their fanatical, get-a-life, football-crazed rubedom was going to cost them actual money, if not in direct taxation, in revenue that would be better applied to things like fixing the roads carrying their purple and gold party wagons, and educating their kids.

* A sell job by the Wilf family and the NFL based in the fear that the Vikings would move to Los Angeles rather than accept a deal that was anything less than a deep, warm, wet kiss. This despite ample evidence that Los Angeles and cash-strapped California were in a worse position to offer an obscene subsidy than we were. Or that, as the NFL plays this game, the other 31 team owners would be in line for far, far less compensation if an established franchise (the Vikings) moved to LA compared with the league granting some software billionaire an entirely new franchise.

A couple quick asides: As it was all going down I had a chance to interview to one of the highly-regarded local CEOs invited in to lead the corporate community cheerleading for the stadium. The gentleman is your classic top-of-the-line business leader — well-spoken, affable, just charming enough and oozing confidence. But by the glazey expression I got when I mentioned this rather significant windfall profit disparity to team owners between established v. expansion franchise, it was clear this was not something he had heard before … and that it didn’t matter. He had been asked to build support for the Vikings’ stadium — which meant the financing package at hand. Getting all cutthroat and ruthless with the fantastically successful NFL executive team, or the equally successful Wilfs was not part of the gig. His job was to sell the product he was handed.

I also had a chance to spend an hour with Zygi Wilf, about the time the Arden Hills idea, with all that lucrative development, was starting to crumble around him. An hour tells you very little about a guy. But the one unmistakable takeaway was that Zygi is a very serious and meticulous businessman. It is his life, and was his much beloved father’s life before him. Nothing of serious import escapes his attention. Every detail of contractual understanding has a dollar figure projected on to it. That’s one way you succeed in New Jersey real estate.

Point being: The combination of rube hysteria, rube-like cheer-leading by some media opinion-leaders, naked self-serving editorial strategies by others, the over-stated, under-examined fear of losing the team to LA, the usual political terror at being held responsible for such a calamity and the NFL/Wilfs deft feeding and parrying of all the above essentially sucked any negotiating cunning out of the local players’ heads. … and they were no match for the NFL or Wilf to begin with.

Which sets us up for our next act of communal abasement … finding another way to bleed $300-plus million from taxpayers to finance an equity-bonanza for a multi-millionaire family and their astonishingly profitable protectorate.

Hey, if Florida doesn’t have experts in fleecing people, what state does?
This keep-the-team-at-all-costs stuff is a bit like presidents, especially JFK, not wanting to be the one who lost the next China to communism. Who wants to be the governor in office when the Vikings take off for Lubbock or wherever?
And I love the hard-headed, cautious Midwesterners who will turn to gambling to finance anything and, soon, everything. As far as I’m concerned, the only gambling that should go on in Minnesota or anywhere should be run by the Indian tribes. Every time we squeeze another slot machine or pull-tab gizmo into a convenience store or grade school, we’re taking gambling business away from the tribes, which need and deserve the monopoly on fleecing us Wasichu.

It’s a blunder, and you deserve the gloat. However, it should be noted that you are a truly graceful gloater.

But I have to say, the “fiscal note” on something like this was naturally going to be speculative, just because it was a brand new consumer offering, with no consumer demand history from which to draw.

Everyone had to flat out guess what consumer demand would be, because they had no way of doing anything other than guessing. Dayton had to guess. Zygi had to guess. The gambling vendor had to guess.

Maybe the vendor”s guess was calculated fleecing, or maybe it was just naive or incompetent. Hard to know. I tend to think it was just the kind of irrational exuberance that business boosters often suffer from, but who knows.

Seems like the lesson is this: If you need the money to get something done, never rely on a brand new revenue source with no track record.

I don’t think the lesson is: Government should never ask private sector officials for input on a fiscal note. There’s nothing inherently evil about Dayton’s folks doing that.

It was just dumb to bet the farm that anyone could guess right about something so new.

And, I can’t help but think underlying it all is that admission into the NFL, if that’s what you want, has a steep price. Notwithstanding the prospect of an LA move or not, the team was now playing in a veritable slum relative to the standard the league aspires to.Still, as reported, lack of dilligence concerning the financing sources does seem infantile

I think the key issue, at least here for me, is the desperation to find ANYTHING that could plausibly make the deal work. There was widespread acceptance of the notion that the Vikings-to-LA threat was real and immediate. I never saw that. Either did people like Neil de Mause at his Field of Schemes site and others watching both the drama in California and here. Had the local boosters called the NFL’s bluff there would have been some kind of apocalyptic grandstanding by the league — the LA extortion gambit has been enormously valuable in terms of stadium upgrading all over the country and they don’t want it weakened– but in the end I would have bet that somehow the league would have “enhanced” its “loan” to Wilf for a greater portion of the $348 million.

But I suspect too many participants here, from the corporate boosters like the guy I mentioned, to people like Ted Mondale regard themselves as peers to the NFL’s owners conclave. They are not. The NFL is uniquely well-endowed with money, emotional influence over a vast fan base and contract negotiation skill.

The implication here is that Zygi is a highly-skilled extortionist. Heck, maybe he is, maybe it’s all in how you define extortionist. I know volumes have been written on the subject but strictly in the context of all the communities participating in subsidized financing for these stadiums how bad did Minnesota get fleeced? How much worse was our deal than the others cut by the NFL and the owners?

“Extortion” is a harsh word, with criminal implications. The extortion-by-fear of losing the team to LA has a kind of Darwinian charm to it. I mean if your negotiating opponent is so clueless about a key facet of the situation, who wouldn’t exploit that stupidity for every possible advantage? I know I would. The more apt characterization is that the state’s leaders were in way over their head negotiating anything with the likes of Wilf and the NFL.

Yes, I hear you. I’m way too lazy to look up the deals other cities consumated with the NFL for these excessive sports palaces but are there precedents in other negotiations, more favorable to the tax payers then the one cut here? The NFL has the ball. Play or go home I think. However, what appears to a total fiasco, that pull-tab fantasy is impossible to swallow.

I recall various charities expressing deep reservations about the chances of getting this sort of return on any new gambling scheme. Am I the only one who remembers this? The response was to brush them aside as killjoys. No one, most especially the press, seriously examined their numbers or analysis. It’s outrageous that Dayton is being allowed to claim he never dreamed the numbers were wrong. We all know that public agencies charged with investigating an issue will come up with whatever conclusions the boss wants.